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  1.    #1  
    Question for anyone who runs a business.

    After your personal expenses are met, how much of any additional income is reasonable to put aside for payroll? For example, if I make $30K and that meets my personal expenses, anything extra can be divided in this way:

    25%: Savings
    25%: Extra Biz Expenses, Travel/Leisure, etc.
    50%: Payroll

    I know it really depends on what you pay, etc, but there has to be a formula or a percentage that most business go by to cap off payroll expenses to have a profit.
  2. #2  
    Two of my brothers and I are franchisees in two different chains in the restaurant business. Between us we own and operate 6 restaurants, 5 are under the banner of a famous coffee and donut chain and one has a famous root bear as a mascot...

    In our QSR (quick service restaurant) businesses we strive to keep labour as a percent of net sales at around 25%. This allows for good customer service and has a big enough buffer built in to keep the restaurants, washrooms and property clean and attractive.

    This ratio obviously is not applicable to other less labour intensive businesses.
  3.    #3  
    Thanks; great information!
  4. #4  
    If what you're looking for is a labor/sales figure, I'm going to say it really depends on your business. Where I work, 50% is the goal, but I can imagine places where anything over 5% is absurd.
  5. #5  
    When you refer to "Savings" and "Extra Biz...," are you talking your personal finances as the proprietor, or the company's savings and expenses?

    I ask because, often owners do not pay themselves until they have met their obligations to their employees and creditors. It seems as though you are taking out your salary first (which is ok), and trying to decide how to allocate what is left.

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